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12:18 pm

Tue July 9, 2013

Kids Bring Home The Bacon: What They Need To Know

I'm Michel Martin and this is TELL ME MORE from NPR News. They say it takes a village to raise a child, but maybe you just need a few moms and dads in your corner. Just about every week we check in with a diverse group of parents for their common sense and savvy advice. We wanted to continue this conversation about teaching kids about money, especially when they get that first summer job.

We know that the last thing teenagers generally want after getting that paycheck is getting mom or dad to tell them how to spend it. So those are not easy conversations, so we thought this would be a good time to bring in our parenting roundtable for some more real talk about money. With us now are three of our regular contributors. Dani Tucker is an office administrator, fitness instructor, and mom of two. Leslie Morgan Steiner is author most recently of "Crazy Love" and a mom of three.

Lester Spence is a name you often hear in our barbershop roundtable on Fridays, he's an associate professor at Johns Hopkins and he is a father of five. Also with us is Isra Hashmi, she's founder of the blog "The Frugalette" and a mom of three. Welcome to you all, thank you so much for joining us.

DANI TUCKER: Thank you.

UNIDENTIFIED PANELIST 1: Thanks, Michel. Hi.

UNIDENTIFIED PANELIST 2: Thank you.

MARTIN: Dani, I'm going to start with you because you were telling us that - you've told us before, I think, that your kids each got their first summer job at 14. Did you want them to work? Or did they want to work? And did you have conversations with them about what would happen with that money?

MARTIN: And, I think, you're not shy about pointing out that they don't have to work. I mean, it wasn't required that they contribute to the family household.

STEINER: That's true.

MARTIN: But why did they want to work and what did you think about it?

STEINER: Well, as you mentioned, my particular challenge is that my family is privileged in our economic stability. But just like Dani's kids, my kids in their own way, are very motivated to work. My husband and I both went to business school and we're very supportive of them earning their own money and it's a great way for them to learn the joys and values of money. So my older kids, 16 and 14, they both work. Now it's not a daily summer job, but our daughter is very industrious.

The 14-year-old, she got her babysitting certificate from the Red Cross when she was 11. And she is the neighborhood babysitter and boy does she rake in the cash. You know, $80 a night is easy for her. And she's a big saver, too. So she puts a lot of money in her savings account, which I set up for all of the kids when they were about six. And then our 16-year-old is a basketball player and he is not quite as hardworking as his sister, but he is a very active participant in this sophisticated secondary basketball sneaker market. And he buys and resells these, you know, really expensive, colorful, crazy basketball shoes and he too, has made a lot of money and saved it. So they both are earning the value, although it's not quite the same as going out and working at a job where you, you know, get a paycheck every week.

MARTIN: Well, what do you have to say about what they do with that money? Is the conversation that you have - I've got covered what you need, but you've got to take care of what you want? Are they expected to save a certain amount? Are they expected to save to buy something special that they want that you don't want them to have? What do you say about that?

STEINER: Well, their money is for special things that they want to buy that I will not buy for them. But also, I have, without too heavy a hand, I have really encouraged them to save. It's something that my own parents did with me and it's, you know, with a light touch, I've gotten them to put a lot of their money in their savings account with the idea that, you know, the candy and the t-shirts from justice are not going to be around in five years. But if you save and save and save you will be able to buy a car or my daughter, the 14-year-old wants to buy, you know, a New York City apartment.

MARTIN: OK.

STEINER: God, love her. So, yeah. They save. I don't force them to, but I pressure them to.

MARTIN: OK. Lester, what about you? You have five kids and your oldest is old enough to work right now.

LESTER SPENCE: Yeah, in fact, I think she's serving coffee now. I think she's working now, as we speak. You know, what I did was - with her was - and with all my other children, I just try to model good behavior, right. So I don't have a cell phone. I don't - I very rarely, you know, I play video games. I try to buy video games like a year after they come out when they're cheap, just to show my kids the benefit of being frugal.

My daughter has been - she loves concerts so she uses her money for concerts, but she's also - she's taking summer classes now and she paid for her summer classes with her tuition. So I'd like to have more explicit conversations with them going forward, but she's been really good with her money. I've been really proud of her.

MARTIN: Well, is that - I mean, with five kids you've got to have lots of different personalities. Do they vary in terms of the kinds of things they want and like, and how do you manage the fact that maybe one child might be a good saver and the other kid's a spender?

SPENCE: So there I'm pretty forceful, right. So I have one kid who, every time, is like no, I want to buy something, I want to buy something, I want to buy something. But in my household, even though I'm liberal in some ways in my politics, as far as - they still have to come to me. Even if that money is in their account through their grandparents, they still have to come to me to OK all their purchases. At least, you know, the younger ones - my daughter is a different category.

MARTIN: All their purchases.

SPENCE: All their purchases.

MARTIN: There will be no tube tops in the Spence household.

SPENCE: Like I said, I'm a Democrat with a small D, but in the house, it's a monarchy.

MARTIN: Isra, what about you? You write about taking your family from what you call fancy to frugal in a few years, why is that?

ISRA HASHMI: Hi, Michel. Yeah. So I grew up completely not being frugal. I was, you know, privileged, I guess you could say, growing up. Everything was bought off the rack, anything we wanted, best schools - I mean, my schools in elementary were, you know, as much as universities are now. I had no idea of how things cost and I just spent and spent and spent. And then I got married and I didn't have my parents' money anymore and I was kind of left out to dry and I got scared.

And my husband grew up the same way - no idea, no value for money. And we just started maxing out credit cards and we ended up moving to Boston from Tucson - very, very expensive city. I was pregnant with my second and we went to the grocery store and I couldn't pay for diapers, and I got really scared that - what are we going to do? And that's just - that was my catalyst for just changing our lifestyle completely. Literally, 180 degrees - it's totally different. That was four years ago. And we have a third baby and I'm happy to say nothing was bought on credit, we actually have no credit cards. We got ourselves out of $56,000 debt on one very small income that my husband was getting from his stipend.

SPENCE: That's a book.

HASHMI: And now I go back and say, I'm going to do things differently, a lot differently with my kids. And they're young. I have three under seven and I think having the conversation starting at, you know, two - three is excellent, past second grade it's already too late.

MARTIN: Really? Well, talk about that. What kind of conversations do you have? I mean, do you, you know - 'cause kids at that age have very little concept of the intangible of - what is real to them is what they see, you know.

HASHMI: Exactly.

MARTIN: So what kinds of conversations do you start having even that young?

HASHMI: You know, starting at 18 months, two years - once they realize they can take something out of the store and take it home is when you start to understand that, you know what, they're getting that they can have this thing. But what they're not getting is that middle part, which is we're giving money to get this thing. So we - I mean, I have a two-year-old right now and she understands when we go to the store and I will tell her, we don't buy right now, no buy.

You know, you have to take it down a level and it's a conversation that starts young and really ends never, it just progresses as they get older.

My seven-year-old, you know, we do allowance, but I don't do allowance just for, you know, being alive or, you know, just living in the house. I don't get, you know, a paycheck for just, you know, sitting on the couch and doing nothing. I would love it, but that's not reality. And I don't want them to think that's how money comes either. So they have, you know, their responsibilities, their chores. At the end of the week, if everything is done, just like a paycheck, they can get their allowance.

MARTIN: That's how it is. So no allowance, but you can do jobs around the house. Dani, what about you? Where are you on the allowance question? Did your kids ever get an allowance?

TUCKER: Yeah, I allowed you to live in my house. That's their allowance. That was their allowance.

(LAUGHTER)

TUCKER: No, you ain't getting no money from me for doing no chores. I didn't get no money from my parents for doing no chores. Like my father said, I allow you to eat. I allow you to sleep. There's your allowance - go to work.

MARTIN: Where are you on the whole question of discretionary items, like we were talking about earlier - the veto-proof items. Is the idea for the kids, if there's something that - if they've satisfied your other requirements like God first, me next, the house next...

TUCKER: No, I still have to veto-proof because, you know, like I always tell my kids, Prada does not pay your rent so stop paying his. OK. Prada don't pay your rent. So why am I going to Prada's? He got more money than we got. So they've learned, but at the same time, I don't keep it because, you know, they work hard, especially when they accomplish something and they're like, OK, Ma, you know, I really want to get these Nike's. Get them, because there's got to be some reward, you know. So I do, but you won't roll Nikes in twice a month. No. You know, once a quarter, twice a year, maybe, you know, when they go on sale, but other than that...

MARTIN: Lester.

SPENCE: Real quick. I grew up struggling. My parents, I remember, I want to give an apology to my dad, 'cause I remember that there was a moment where my mom was like, I will give you a dime allowance for every year you were. And I was like ten, so it was, like, a dollar a week and there were several weeks that I didn't get my dollar. I started calculating, right. I remember telling my dad, Dad, you owe me. And I now understand on the other side, right. Like, man, Dad, I am so sorry.

MARTIN: He owes you a lot of interest now.

(LAUGHTER)

MARTIN: Do you - Lester, do you give your kids an allowance?

SPENCE: No, no. But, I mean...

MARTIN: I hear a t-shirt line coming to the floor here. Your allowance is living in my house.

SPENCE: Yeah. I like that, I like that. I wish I could, but my loot just doesn't allow for it right now. It just doesn't allow for it. So what I plan to do is teach them ways to make their own money, but shoot, I'm in the position my dad was when I was a kid.

MARTIN: Leslie, what about you? Where are you on the allowance question? 'Cause some people really believe in it and some people really don't.

STEINER: I have off and on, since my kids were very little, given them a weekly allowance, some small amount. And it's their job to ask for it and to keep track of it. And so, yes I believe in it. I don't think that it's an answer to anything. It's not a silver bullet to teaching them about money. And right now, they have - my older kids have a clothing allowance, which is quarterly and, again, they keep track of it, 'cause I think it's important for them to have an allowance so they know that there's a limit and to make their own spending decisions.

And I also got tired of them just coming to me - can I have this, can I have this, can I have this? And I want the ownership to be on them. And it's fascinating that they spend so differently. The 14-year-old daughter is very steady in how she spends and our son's sneaker business came out of his allowance. His first pair sneakers was with allowance money and then he wanted more, and we wouldn't pay for any more. And so that's how he got into the resale sneaker business, to fund his own obsession with sneakers, which is fine. He's learned a lot of good lessons.

MARTIN: If you're just joining us, our parenting roundtable is talking about how they teach their children how to manage money. With us are our regulars: Leslie Morgan Steiner and Dani Tucker and Lester Spence - you often hear him on our barbershop roundtable. Also with us, Isra Hashmi. She writes thefrugalette.com, a blog. That's fascinating. And so, Isra, you were saying you do do allowance or you don't do allowance?

HASHMI: I do. I'm kind of, you know, the back-and-forth, too, a little bit. I mean, there's no, you know, hard you have to do it every week, but when they do start, you know, asking every time you go into a store, can I have this and can I get this, you realize, you know what, that's something you need to start deciding for yourself with your own, you know, little bit of money that you get.

So for my seven-year-old, you know, he doesn't ask as much now when we go to the store because he's starting to realize that if I buy this with the money I have now, then maybe if I wait I can get something bigger. So, yeah. I do, starting around first grade which is when I started with him. And my other two, probably around first grade, I'll start, you know, doing allowance.

MARTIN: Leslie, I'm fascinated by the clothing allowance idea. How did you develop that idea?

STEINER: I have no idea. It was just out of desperation of getting sick of saying no, no, no. And I also, I didn't like that I was the one deciding if our daughter could buy a $15 t-shirt or a $45 t-shirt. You know, I wanted her to make those kind of crazy decisions. And it just worked and I like they keep track of it, there's some math involved. They have to divide the year into quarters and, God, it just works so well. And our 11-year-old, who doesn't have it yet, is dying to get it. And I also just want to echo that the age timing - I think that around first grade is a really good time to start giving kids a little bit of control and a little bit of an allowance because that's when they really start to, kind of, put all the pieces together.

MARTIN: Yeah. Dani, I wanted to ask you about that because teenagers, in particular, is when - even really younger - first of all, all kids TV - TV in general is about spend, spend, spend, buy this, buy this, buy this. And then it starts to be a thing where kids feel, kind of, that's how they belong, you know, this is how they, kind of, belong to a group. I remember when I was a teenager and we'd get on the bus. I mean, there were girls who would literally do an inventory of what you had on. Oh, you're wearing this and you're wearing that and - how did you manage that?

TUCKER: Well, I was a single mother so it was managed. I mean, they didn't have those choices. They had to, you know, wear what I could afford or what other gave them. But they learned to appreciate it as a blessing. You could have nothing. And then we went from there and they worked hard. They worked hard to - when they really wanted something, like Leslie's kids, I wouldn't call it a clothing allowance, but they were known for, I'm getting this, I'm saving for it. So everything they did - they was always looking for jobs, you know, cutting grass - whatever they could do. But that was their thing...

MARTIN: That was the thing.

TUCKER: ...Babysitting. Yes, you know it. Always, can we go to Michel's? I know she got something for us to do.

MARTIN: True.

(LAUGHTER)

TUCKER: Call her, call her. But I like that because they hustle. For us, it's called hustling. Hustle to get what you want.

MARTIN: Final thought? Lester, you have a final thought? Is there one piece of advice you wish you had had that you'd like to pass on?

SPENCE: You know what, I just - I wished that - my parents did an excellent job with me. I wish there was - I wish I could give people like a bulletproof answer to dealing with kids and their spending habits, but there just isn't, right, 'cause you're going to have a kid who just saves, saves, saves, no matter what. And then you're going to have kids who, no matter how much you tell them to save, they're going to go for broke literally. So that's it.

MARTIN: Isra, what about you? The best piece of advice you wish you'd given or you want to give.

HASHMI: My best piece of advice really is just, you know, we as parents, we don't want to see our kids making mistakes with money. But, you know, it's better to let them make the mistakes now, early on when it doesn't really matter than, you know, later when, you know, they have their own families and they get married and have their own kids they have to deal with, and then they max out their credit cards. I'd rather they buy something now $5 that they regret, you know, the next day than, you know, doing that later when they're grown-ups.

MARTIN: Leslie, final thought from you really quickly.

STEINER: Well, the risk for me has been that my children grow up to be either spoiled brats or to feel overly guilty about their unearned privilege. And my goal has always been to teach them to value and respect money's power without worshiping it or attaching too much significance or anxiety to it.

MARTIN: Leslie Morgan Steiner is an author and mom of three. She joined us for New Hampshire Public radio in Concord, New Hampshire. Isra Hamshi is the founder of the blog "The Frugalette" and a mom of three. She was with us from NPR West in Culver City, California. Lester Spence is an associate professor at Johns Hopkins and a dad of five, with us in our Washington D.C. studios, along with Dani Tucker an office administrator, a fitness instructor, and mom of two. And she was also here in D.C. Thank you all so much.

TUCKER: Thank you.

HASHMI: Thanks, Michel.

SPENCE: Thank you.

STEINER: Thank you, TELL ME MORE.

MARTIN: That's our program for today. I'm Michel Martin and you've been listening to TELL ME MORE from NPR News. Let's talk more tomorrow. Transcript provided by NPR, Copyright NPR.